LMT Debt-to-Equity Ratio Analysis

The debt-to-equity ratio measures how much a company relies on borrowed money versus shareholder funds to finance its operations, with a higher ratio indicating greater financial leverage and risk.

At 2.34x, LMT’s ratio is far above the sector median of 0.73x, placing it in the 89th percentile among peers—meaning only 11% of comparable companies carry higher leverage. The year-over-year change is not available, but quarter-over-quarter the ratio fell 15.2%, from 2.76x to 2.34x, showing a recent reduction in debt relative to equity. Despite this decline, the current level remains elevated versus the sector, suggesting the company still has a heavy debt load that could strain cash flows if earnings weaken. The downward trend in the most recent quarter is a positive signal, but the high absolute level leaves limited room for comfort. This metric supports the overall CAUTIOUS verdict, as the combination of a high debt-to-equity ratio and only a single quarter of improvement implies ongoing financial risk.

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